 |
For help call a Lead Counsel Rated Attorney
-
Louisville, KY
866-368-4654
-
Garden City, NY
866-435-3874
-
New York City, NY
866-785-3415
-
Saint George, UT
866-435-2849
Frequently Asked Questions
How can a Probate Attorney Help Me?
Whether or not the estate needs to be administed in a probate proceeding, a probate attorney can help in many ways. For one thing, the probate attorney can help you file the decedent's will. Most states have laws that state that the decedent's will must be filed with the district court within a certain amount of time (typically 10 days) even if there is no estate administration. The attorney can also help you file the necessary paperwork with the probate court to administer the estate. You will also need the attorney's (and typically an accountant's) help with the actual estate administration, even if all the assets can pass without a formal probate proceeding. Additionally, the attorney is there for you if any legal complications arise in probate. Find a probate attorney in your area to find out other ways he or she can help you.
What is a Probate Court?
In many states,
the probate court serves several functions. The most common is administration
of the estates of persons who die, called a probate proceeding. However,
the probate court also handles guardianships and conservatorships. Thus,
the same court may decide to appoint a conservator for an incapacitated
person, and then may administer that person's estate several years later,
after death.
What is a Probate Proceeding?
In a probate
proceeding, the court oversees the process of identifying the deceased person's
property, paying any debts, identifying the proper heirs, and distributing
the property to them. Most of the actual work is done by a personal representative, who is usually
a relative or friend of the deceased person, with the assistance of an
attorney and often an accountant and possibly one or more appraisers. The generic term "personal representative" has replaced such terms as executor, executrix, administrator and administratrix for the purposes of these FAQs.
When is Probate Necessary?
When a person dies, their "non-probate" assets will automatically pass by law to designated beneficiaries without court supervision or intervention.
Non-probate assets include life insurance, living trusts, retirement accounts, joint bank accounts or bank accounts with named beneficiaries, payable on death (POD) accounts, and "joint tenancy" property.
All other assets titled solely in the decedent's name at death like household and personal items, bank accounts, stocks, automobiles, and real estate are considered "probate assets," and must be administered in a probate proceeding.
How are Probate Assets Distributed in a Probate Proceeding?
After the court determines which assets are non-probate assets, (depending on state laws) the estate is typically administered in one of three ways:
- By Affidavit (Summary Administration): If the total value of the probate assets in an estate is less than your state law's specified amount (typically between $25,000 and $30,000), an heir may be able to fill out an affidavit for administering the estate. The person holding the assets would then release them to the heir without further action.
- Informal: Informal administration means the estate is not court-supervised. Normally, attorneys have limited roles in these proceedings. How much the attorney does in these proceedings depends on how much help you need.
- Supervised (Formal): A supervised (or formal) administration is needed when there is a dispute among the parties who have an interest in the estate. In this situation, the court has to settle the dispute and attorneys are likely to be involved the entire time.
Laws vary from state to state, and how estates are administered can differ greatly. The above-described are only general scenarios of typical estate administration. Check with your probate lawyer for more information.
Estate administration starts by filing a number of forms with the appropriate district court. The forms are available from Bradford Publishing or you an get them from your probate attorney's office. While the forms are not very complicated, there are a number of traps for the unwary and it is normally a good idea to get an attorney's help.
In an informal administration, once the estate is up and running, the personal representative can go ahead and pay the taxes and debts. Then, he or she distributes the probate assets either according to the instructions in the will or under the laws of intestacy if the decedent died without a will. At the end of the informal administration proceeding, an estate may be closed by filing with the court a form that states the personal representative has paid all debts and taxes and distributed the remaining property to those entitled to it.
Estate administration can take as little as six months for simple estates or up to several years, particularly if there are disputes involved. The typical amount of time estate administration takes is 7 to 12 months.
Who is in Charge of Administering the Estate?
The personal representative (a person, bank or trust company) appointed to represent the person of the decedent is in charge of administering the estate. The personal representative is normally named in the will. But, the will doesn't name a personal representative, the court decides who will administer the estate. But, an heir or interested party can file a form asking the court to appoint them to be personal representative.
What does the Personal Representative Do?
Pursuant to state law, the personal representative performs the following duties when administering the estate:
- Identify, gather, value and safeguard probate assets.
- Publish a notice of administration (notice to creditors, or similar notification, depending on the state laws) in a local newspaper, giving notice of the administration of the estate and of requirements to file claims and other papers relating to the estate.
- Conduct a diligent search to locate "known or reasonably ascertainable" creditors, and notify them of the time by which their claims must be filed.
- Object to improper claims and defend suits brought on such claims.
- Pay valid claims.
- File tax returns.
- Pay taxes.
- Employ necessary professionals to assist.
- Pay administrative expenses.
- Distribute statutory amounts or assets to the surviving spouse or family.
- Distribute assets to beneficiaries.
- Close probate administration.
Who (or What) can be a Personal Representative?
It depends on your state laws. However, the following are general guidelines. The personal representative:
- Could be an individual, bank, or trust company, subject to certain restrictions.
- Must be an individual who is either a resident of the state in which the probate proceedings is taking place, or is a spouse, sibling, parent, child, or certain other close relative.
- Could be a trust company incorporated under the laws of the state in which the probate proceeding is taking place, or a bank or savings and loan authorized and qualified to exercise fiduciary powers in that state.
How are Personal Representatives Selected by the Court?
If the decedent left a valid will, the designated personal representative nominated in the will has preference to serve, and will generally be selected by the court if there is no obvious reason not to choose him/her. Otherwise, the surviving spouse or a person selected by a majority in interest of the heirs may possibly be chosen. If all else fails, the court will choose according to the state laws that prevail.
Does the Personal Representative Need an Attorney?
In almost all instances the personal representative must be represented by an attorney licensed in the state in which the probate proceeding is taking place. Many legal issues arise, even in the simpliest estate administration.
The attorney for the personal representative advises the personal representative on rights and duties under the law, and represents the personal representative in estate proceedings.
What Documents Does a Personal Representative Need to Start Probate?
The following are documents the personal representative needs in order to start probating the estate. This list is not all inclusive, and may or may not include what is needed according to your state laws. Be sure to consult with a qualified probate lawyer to find out what is needed for the personal representative to administer the estate in your state.
- The original will, codicils, trusts and amendments;
- At least two death certificates without the cause of death;
- Copies of bank statements for the month of death;
- Copies of brokerage statements for the month of death, including any certificates of deposits;
- Copies of any stock or bond certificates that the decedent may have held outside the brokerage account;
- Copies of any general or limited partnership certificates or agreements;
- Copies of mutual fund accounts;
- Copies of deeds to real property, wherever situate;
- Copies of mortgages, mortgage notes and related amortization schedules;
- Copies of IRA, Keogh, pension and/or annuity plans and related account information;
- Life insurance policies;
- Copies of forms 1040s for the last two years of the decedent's life;
- Copies of Florida Intangible Tax Returns for the last two years of the decedent's life;
- Copies of any gift tax returns (Forms 709) which have been filed, if any;
- Copies of any state income tax returns that may have been required to file for the last two years of the decedent's life;
- Copies of certificates of title for any automobiles owned;
- List of all personal property owned including the estimated value;
- List of collectibles valued in excess of $3,000 and any insurance riders;
- Safe deposit box number(s), location and inventory of same;
- Name, telephone number and address of decedent's accountant;
- List of all pending lawsuits whether plaintiff or defendant;
- Any other evidence of assets owned not otherwise noted above.
What Fees are Generally Involved with Probate?
In addition to court fees, the personal representative, attorney and other professionals whose services may be required in administering the estate (such as appraisers and accountants) are entitled by law to reasonable compensation.
Personal representative fees are typically set forth in the will or in a contract set forth between the personal representative and decedent, as agreed among the personal representative and the persons who bear the impact of the fee, as presumed to be reasonable as calculated under prevailing state law (if the amount is not objected to), or by the judge applying the prevailing state law.
Attorney fees are typically set forth as agreed among the attorney, personal representative and the persons who bear the impact of the fee; as presumed to be reasonable calculated under prevailing state law (if the amount is not objected to); or as determined by the judge applying the prevailing state law. And, other professionals who may be involved will generally charge their standard fees (hourly or flat fee) for services they provide.
What is Probate Litigation?
Probate litigation is the process of challenging a provision of the Last Will and Testament, a codicil to the Last Will and Testament, the appointment of the personal representative, or the entire contents of the Last Will and Testament. The facts of each dispute will define the exact cause of action (e.g., lack of mental capacity, undue influence, duress, intentional interference with an expectancy, and/or improper signing of the will) that needs to be prosecuted or defended. The attorney representing the recipient of a Notice of Administration telling him/her that an objection to the probate proceedings must be commenced within a certain period of time or be forever barred is typically the one who initiates the probate litigation.
Benefits of Probate
Probate does
provide some important benefits. Most important, it provides some court
supervision to make sure a deceased person's property is accounted for and
distributed as intended.
Once the
probate "creditor's claim period" expires (generally four months after
the personal representative is appointed) it is very difficult for creditors or others
to claim any interest in the estate. For a professional (such as a doctor,
accountant, or attorney), probate may bar later lawsuits that would otherwise
be difficult to defend without the help of the deceased person.
Drawbacks of Probate
Probate has several drawbacks, which lead many people to seek to avoid probate.
Probate
Delay: Formal probate takes at least six months to a year. Sometimes,
probate can drag on for several years, or in extraordinarily rare situations,
for decades.
Often, these
delays are not important. The surviving family members usually have immediate
access to joint bank accounts, and rapid access to life insurance proceeds.
If special needs exist, the probate court will usually allow preliminary
distributions or payment of an allowance to family members.
However,
in certain situations, probate delays can create problems. For example,
a small business or professional practice must often be sold quickly after
death to avoid losing clients. If a deceased person owned stock options
related to employment, those options may lapse if not exercised quickly.
Probate
Fees: Second, probate can be expensive, because of fees paid to the
attorney and to the personal representative. The actual fees paid to the probate court
are minimal, typically about $200 for filing fees. For property other
than cash or its equivalent, a probate referee must appraise the property,
for a fee equal to one-tenth of 1 percent (0.1%) of the value of the property.
(Even if probate is avoided, the IRS may require an appraisal.)
The personal representative's
fee and attorney's fee are much larger. The probate code provides that
the personal representative and attorney may each charge a fee that ranges from about
3 percent of a modest estate to less than 1 percent for a very large estate.
These probate fees are computed only on property which is subject to probate
(and thus usually won't include life insurance, retirement accounts, or
joint tenancy property).
However,
if the personal representative is also the sole beneficiary of the estate, he or she
will usually waive the personal representative's fee, since it is subject to income tax.
In addition, the attorney's fee is negotiable; many attorneys charge hourly
rates, with the statutory fee set as a maximum fee for ordinary probate
legal services.
Finally,
even if probate is avoided, the fees probably won't be. An attorney and/or accountant
usually must be hired to help administer a deceased person's trust or
non-probate estate. In addition, the trustee of a "living trust" is usually
entitled to claim a reasonable fee for managing the trust, although many
family members do not actually request fees.
Other Helpful
Sources of Information
Social
Security: Every person should request a "Personal Earnings and
Benefit Estimate Statement" at least once every three years, to confirm
accurate recording of your earnings and to help predict your future benefits.
Call 800-537-7005 to obtain a form to request the statement.
Employee
Benefits: If you work for a large company or government agency,
check with the personnel office for assistance and information about benefits
and retirement options.
Books:
Check out your local library for many helpful books on estate planning.
If you prefer to buy a book, try Harvey Platt's Making a Will and Creating
Estate Plans (Longmeadow Press, 1991, $4.95), which is only available
through Waldenbooks.
Credit
Reporting: To learn how to obtain a copy of your credit report,
call TRW (800-392-1122), Equifax (800-685-1111), and/or TransUnion (800-851-2674).
Long-Term
Care: The California Department of Aging produces an excellent
booklet on long-term care, called "Taking Care of Tomorrow: A Consumer's
Guide to Long-Term Care." You can obtain a free copy from any insurance
agent who is licensed to sell long-term care insurance, or from the Department
of Insurance (800-927-4357).
Other
Resource Links:
COPYRIGHT
© ESTATE PLANNING AND WILLS 2008 - ALL RIGHTS RESERVED
Hosted By
|
|
